Hong Kong, Macau link bond clearance systems to create larger market for fundraising

Four new bond issuances worth 3.2 billion patacas (US$401 million), plus 18 secondary-market transactions, settled on first day of linkage

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A general view of Sai Van Bridge and Taipa in Macau on 28 September 2024. Photo: Eugene Lee

Published: 12:02pm, 21 Jan 2025Updated: 6:41pm, 21 Jan 2025

Hong Kong and Macau have linked up their bond clearance and settlement systems, creating a larger market for fixed-income financial products that can help companies and local authorities raise capital.

The Central Moneymarkets Unit (CMU) under the Hong Kong Monetary Authority (HKMA) and Macau Central Securities Depository and Clearing launched the link on Tuesday for clearing, settling and holding bonds lodged in each other’s systems.

On the first day, four new bond issuances in Macau worth 3.2 billion patacas (US$401 million) were settled via Hong Kong’s CMU, and there were 18 secondary-market transactions by Hong Kong and Macau investors, said Benjamin Chan, chairman of the Monetary Authority of Macao (AMCM).

“The first day of operation for the connection of the two clearing houses has been very smooth,” he said at a ceremony at the World Trade Centre in Macau. “We expect there will be more institutional investors involved in the Macau debt markets after the linkage.”

The connection will provide a cross-border investment and financing channel, enabling investors from both markets to participate in each other’s bond market with greater ease and efficiency, the HKMA said.

Benjamin Chan, chairman of the Monetary Authority of Macao, speaks at a launch event at World Trade Centre Macau on January 21, 2025. Photo: Enoch Yiu

“The direct linkage showcases Hong Kong’s role as a “superconnector” and represents a major step towards developing the CMU into an international CSD in Asia,” HKMA’s CEO Eddie Yue Wai-man said in a statement.